Stocks maintained their upward momentum at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index settling above the 188,000 level, amid expectations of an interest rate cut, on Tuesday.

The benchmark index opened with a sharp decline in the morning, hitting an intraday low of 187,192.01 during the opening hours of trading.

This was followed by a strong recovery, with prices steadily moving higher into the early afternoon.

Although there was some profit-taking later, the index remained bullish, hitting an intraday high of 188,958.37.

At close, the KSE-100 settled at 188,621.78, an increase of 860.09 points or 0.46%.

The rally comes amid growing expectations of a policy rate cut in the upcoming Monetary Policy Committee (MPC) meeting scheduled for January 26, following signals of further monetary easing from recent Treasury bills and Pakistan Investment Bond auctions.

In a key development, the International Monetary Fund (IMF) lowered Pakistan’s economic growth outlook, cutting its GDP projection for the current fiscal year to 3.2%, down from 3.6% estimated in its October 2025 World Economic Outlook.

The Fund, in its latest report, estimated Pakistan’s GDP growth at three per cent in 2025, which is projected to grow to 3.2% in the outgoing fiscal year 2026 and 4.1% in 2027.

On Monday, the PSX extended its bull run, closing at another all-time high, as across-the-board buying, optimism over better-than-expected corporate earnings, and growing expectations of a policy rate cut in the upcoming MPC meeting drove investor sentiment.

The benchmark KSE-100 Index surged 2,662.86 points or 1.44% to close at 187,761.69 points.